TIDMBHP
RNS Number : 3568U
BHP Group PLC
02 December 2021
A version of this document with diagrams of BHP's current Dual
Listed Company structure and BHP's proposed structure following
unification has today been submitted to the FCA National Storage
Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
NEWS RELEASE
Release Time IMMEDIATE
Date 2 December 2021
Number 31/21
BHP to proceed with Unification proposal
BHP has today announced a final Board decision to unify BHP's
corporate structure under its existing Australian parent company,
BHP Group Limited.
The Board believes unification is in the best interests of BHP
shareholders. It will result in a corporate structure that is
simpler and more efficient, reduces duplication and streamlines
BHP's governance and internal processes. A unified structure will
also improve flexibility for portfolio reshaping to maximise
shareholder value over the long-term, including facilitating a
simpler separation of the Petroleum business.
A Shareholder Circular and a Prospectus are expected to be
published on or around 8 December 2021, which will contain further
information on unification and the Limited shares, including
details of the proposed UK scheme of arrangement to effect
unification, an independent expert's report on whether unification
is in the best interests of BHP shareholders, and the notices of
shareholder meetings of BHP Group Limited and BHP Group Plc, which
are expected to take place on 20 January 2022.
Unification is expected to complete by 31 January 2022 subject
to approval by the shareholders of both BHP Group Limited and BHP
Group Plc, receipt of remaining regulatory approvals and UK Court
sanction of the scheme.
BHP Chair, Ken MacKenzie:
"BHP is in great shape and now is the right time to make
strategic, transformative changes for the future. Unification will
create one parent company, one share register and one share price
globally. We believe this is the best structure for BHP to provide
the resources the world needs and create long-term shareholder
value."
BHP CEO, Mike Henry:
" A unified corporate structure will make BHP simpler and more
agile, with the strategic flexibility required to shape our
portfolio to deliver value through producing the commodities needed
for continued economic growth, improved living standards,
electrification and decarbonisation."
"We will retain listings in the UK, US, South Africa and
Australia, providing BHP with continued access to global markets
and giving shareholders the opportunity to benefit from our
portfolio, management and operating performance for long-term
value."
Background to unification
BHP currently operates under a dual-listed company (DLC)
corporate structure which was established at the time of the BHP
and Billiton merger in 2001. The DLC structure comprises two parent
companies - BHP Group Limited (Limited) in Australia and BHP Group
Plc (Plc) in the United Kingdom - with separate stock exchange
listings and separate share registers. The two groups operate as a
unified economic entity with a common board and management, and
shares in Limited and Plc carry equivalent voting and economic
rights.
Following a review of the DLC structure, on 17 August 2021 BHP
announced its intention to unify its corporate structure. With
changes over recent years to the BHP portfolio, a significant
reduction in the earnings contribution from Plc assets and a
material reduction in the expected costs of unification, the BHP
Directors have decided unanimously that now is the right time to
unify the corporate structure.
To effect unification, Plc shareholders' shares (and ADSs[1])
will be exchanged for Limited shares on a one-for-one basis,
resulting in Limited becoming the sole parent company of the BHP
Group. There will be no change to the respective shareholdings of
each Limited shareholder nor to the proportionate interest of each
shareholder in the unified BHP Group.
BHP will have its primary listing on the ASX, a standard listing
on the London Stock Exchange (LSE), a secondary listing on the
Johannesburg Stock Exchange (JSE), and a sponsored Level II
American Depositary Receipt program on the New York Stock Exchange
(NYSE). Our global investor base will continue to be able to invest
in BHP on the same securities exchanges as prior to
unification.
Diagrams of the existing DLC structure and BHP's proposed
structure following unification are set out in the attachment to
this release.
Unification will not change BHP's fundamentals: it will not
change BHP's underlying assets or operations, Board composition,
Executive Leadership Team, corporate presence or cash flow
generation. Importantly, there will also be no change to BHP's
dividend policy, including its ability to pay franked dividends, as
a result of unification.
Advantages of unification
The Board considers the key advantages of unification to
include:
Simplification
Unification would eliminate the inefficiencies and complexities
of the DLC structure and would be a further step towards a simpler,
leaner, more agile and more efficient BHP.
Strategic flexibility
A unified structure would improve agility and competitiveness
for portfolio reshaping to maximise shareholder value over the
long-term, including increasing its exposure to future facing
commodities.
Unification would enable BHP to undertake certain transactions
more simply and efficiently than it can under the DLC structure.
This includes, for example, the agreement to merge BHP's Petroleum
business with Woodside Petroleum Ltd as announced on 22 November
2021, which would be simpler to execute under a unified structure.
Future demergers and equity raising transactions would also be
simpler to execute following unification, with BHP having a single
set of shareholders and only Limited shares on issue.
Elimination of the DLC dividend arrangements
Plc's earnings have reduced over time relative to Limited's
earnings due to the divestment of assets previously held by Plc and
changes in commodity prices. In recent years, it has been necessary
for Limited to pay significant dividends to Plc (and associated
franking credits) to ensure that all BHP shareholders received
equivalent dividends. Plc cannot use the franking credits, nor can
it distribute them to its shareholders.
Following unification, Limited would be the sole parent company
of the BHP Group and the DLC dividend arrangements would be
abolished. All dividends paid by Limited would be paid directly to
shareholders of Limited, including former shareholders of Plc who
receive shares in Limited pursuant to unification. Franking credits
which would have been transferred to and consumed by Plc on DLC
dividend arrangements would instead be distributed on dividends to
the larger Limited shareholder base post-unification.
Elimination of the share price differential, creating a single
global share price
Following unification, BHP shares traded on the ASX, LSE and JSE
would be interchangeable. As a result there are not expected to be
any material differences in the respective share prices on each
exchange (when adjusted for currency differences). Plc shares have
historically traded at a lower price than Limited shares.
Implementation
Unification will require approval by a vote of the shareholders
of each of Plc and Limited.[2] As unification will involve a UK
scheme of arrangement, it will also require the UK Court's sanction
of the scheme.
Implementation of unification also remains subject to approval
of the National Treasury of South Africa and an outstanding
competition regulatory clearance, both of which are intended to be
obtained before the shareholder meetings, and receipt of final
approvals in respect of the admission of Limited's shares to the
standard segment of the FCA Official List and trading on the LSE
and the listing of Limited's shares on the JSE.
A general meeting of Limited is expected to take place on the
afternoon of 20 January 2022 (Melbourne time). A scheme meeting and
a general meeting of Plc are expected to take place in London on
the morning of 20 January 2022 (UK time). These dates are subject
to, amongst other things, the UK Court approving the convening of
the Plc scheme meeting. Further information on these meetings will
be set out in the Shareholder Circular.
If approved and all other conditions are satisfied or waived,
unification is expected to complete on 31 January 2022 (Melbourne
time), meaning that the expected last day of trading in Plc shares
(including Plc shares in the form of ADSs on the NYSE) would be 28
January 2022 (in the relevant jurisdictions), and Limited shares
will be admitted to trading on the ASX, LSE, JSE and Limited ADSs
on the NYSE on 31 January 2022. On or before 31 January 2022,
certain key steps will be taken to terminate the DLC structure,
including cancellation of the Plc preference shares, the
re-registration of Plc as a private limited company, and the
termination of the DLC Sharing Agreement.
Existing Plc shareholders who hold Plc shares:
-- on the UK register, would generally receive Limited shares in
the form of depository interests that can be traded on the LSE;
-- on the South African register, would generally have their
Central Securities Depositary Participant (CSDP) or broker's
account credited with a beneficial entitlement to Limited shares
which can be traded on the JSE;
-- in the form of Plc ADSs, would generally receive Limited
shares in the form of Limited ADSs that can be traded on the
NYSE.
Certain non-CREST Plc shareholders will have the opportunity to
participate in a sale facility under which the Limited shares they
would otherwise receive will be sold and they will receive the
proceeds of sale.
In addition, a unified Limited does not satisfy the nationality
requirements for inclusion in the FTSE UK Index Series and certain
other European indices post-unification. This may result in certain
Plc shareholders who actively or passively track these indices
choosing not to, or being unable to, hold Limited shares following
unification.
Limited's weighting in S&P/ASX indices is expected to
increase as a result of the additional number of Limited shares on
issue and the greater market capitalisation of Limited
post-unification. This is likely to result in increased demand for,
and buying of, Limited shares from institutional investors who
actively or passively seek to track these indices.
The total transaction costs relating to unification are
currently estimated to be between US$350 million and US$450 million
(pre-tax) and comprise stamp duties and adviser and other fees.
Further information and documents
Further information regarding unification, including a detailed
timetable and more information on the advantages, disadvantages and
risks associated with unification, will be provided to BHP
shareholders in a Shareholder Circular which is expected to be
published on or around 8 December 2021, subject to receipt of the
UK Court's permission to convene the Plc scheme meeting and formal
approval of the Prospectus by the FCA. The Shareholder Circular
will include, as is customary in Australia, an independent expert's
report on whether unification is in the best interests of BHP
shareholders. Additionally, a Prospectus is expected to be
published at the same time as the Shareholder Circular, subject to
receipt of formal approval of the Prospectus by the FCA.
The Shareholder Circular and Prospectus will be available on the
BHP website (bhp.com/unify).
Shareholders of Limited and Plc are encouraged to read the
Shareholder Circular (and Prospectus for shareholders of Plc) once
these become available because they will contain important
information in relation to unification and the shares in Limited to
be issued in connection with unification.
Further information on BHP can be found at: www.bhp.com .
Disclaimer
BHP makes no representation or warranty as to the
appropriateness, accuracy, completeness or reliability of the
information in this release.
This release is for information purposes only and is not
intended to and does not constitute or form part of any offer to
sell or subscribe for or any invitation to purchase or subscribe
for or otherwise acquire or dispose of any BHP securities or the
solicitation of any vote or approval in any jurisdiction pursuant
to unification or otherwise, nor will there be any sale, issuance
or transfer of any BHP securities pursuant to unification or
otherwise in any jurisdiction in contravention of applicable law.
This release does not constitute a prospectus or prospectus
equivalent document.
Prior to making any decision in relation to unification or as to
whether to invest in the shares in Limited, investors should read
the Shareholder Circular and the Prospectus in their entirety,
including the information incorporated by reference. Investors must
rely upon their own examination, analysis and enquiries of BHP and
the terms of the Shareholder Circular and Prospectus, including the
merits and risks involved.
Forward looking statements
This release contains forward looking statements, including
statements regarding: plans, strategies and objectives of
management; approval of certain projects and consummation of
certain transactions; unification, including, but not limited to,
the perceived benefits of unification and expectations around the
financial impact of unification on the BHP Group; future
performance and future opportunities. Forward-looking statements
may be identified by the use of terminology, including, but not
limited to, 'intend', 'aim', 'project', 'see', 'anticipate',
'estimate', 'plan', 'objective', 'believe', 'expect', 'commit',
'may', 'should', 'need', 'must', 'will', 'would', 'continue',
'forecast', 'guidance', 'trend' or similar words. These statements
discuss future expectations concerning the results of assets or
financial conditions, or provide other forward-looking
information.
These forward looking statements are based on management's
current expectations and reflect judgments, assumptions, estimates
and other information available as at the date of this release.
These statements do not represent guarantees or predictions of
future financial or operational performance, and involve known and
unknown risks, uncertainties and other factors, many of which are
beyond our control, and which may cause actual results to differ
materially from those expressed in the statements contained in this
release. The BHP Group cautions against reliance on any
forward-looking statements or guidance, including in light of the
current economic climate and the significant volatility,
uncertainty and disruption arising in connection with Covid-19.
Forward-looking statements contained in this release apply only
as at the date of this release. To the extent required by the FCA
Listing Rules, the Disclosure Guidance and Transparency Rules, the
Prospectus Regulation Rules, the ASX Listing Rules and other
applicable regulations, BHP will update or revise the information
in this release. Otherwise, BHP will have no obligation publicly to
update or revise any forward-looking statement, whether as a result
of new information or future developments.
No profit forecasts or estimates
No statement in this release is intended as a profit forecast or
estimate and no statement in this release should be interpreted to
mean that earnings per share for the most recent, current or future
financial years would necessarily match or exceed the historical
published earnings per share.
Notice to overseas shareholders
The distribution of this release into a jurisdiction other than
the United Kingdom or Australia may be restricted by law and
therefore persons into whose possession this release comes should
inform themselves about and observe any such restrictions. Any
failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. No
action has been or will be taken by the BHP to distribute this
release in any jurisdiction where action for that purpose may be
required or doing so is restricted by law. Accordingly, this
release may not be distributed or published in any jurisdiction
except under circumstances that will result in compliance with any
applicable laws and regulations.
Notice to US investors
The securities to be issued by Limited in connection with
Unification have not been, and will not be, registered under the US
Securities Act of 1933, as amended (the "US Securities Act"), or
the securities laws of any state or other jurisdiction of the
United States. Any securities to be issued if Unification is
completed are anticipated to be issued in reliance on the exemption
from the registration requirements of the US Securities Act
provided by Section 3(a)(10) thereof on the basis of the approval
of the High Court of Justice in England and Wales.
Current DLC structure
[Figure 1]
BHP structure following unification
[Figure 2]
Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary
Media Relations Investor Relations
Email: media.relations@bhp.com Email: investor.relations@bhp.com
Australia and Asia Australia and Asia
Gabrielle Notley Dinesh Bishop
Tel: +61 3 9609 3830 Mobile: Mobile: +61 407 033 909
+61 411 071 715
Europe, Middle East and Africa
Europe, Middle East and Africa
James Bell
Neil Burrows Tel: +44 2078 027 144 Mobile:
Tel: +44 20 7802 7484 Mobile: +44 7961 636 432
+44 7786 661 683
Americas
Americas
Brian Massey
Judy Dane Tel: +1 713 296 7919 Mobile:
Tel: +1 713 961 8283 Mobile: +1 832 870 7677
+1 713 299 5342
BHP Group Limited ABN 49 004 BHP Group plc Registration
028 077 number 3196209
LEI WZE1WSENV6JSZFK0JC28 LEI 549300C116EOWV835768
Registered in Australia Registered in England and Wales
Registered Office: Level 18, Registered Office: Nova South,
171 Collins Street 160 Victoria Street
Melbourne Victoria 3000 Australia London SW1E 5LB United Kingdom
Tel +61 1300 55 4757 Fax +61 Tel +44 20 7802 4000 Fax +44
3 9609 3015 20 7802 4111
Members of the BHP Group which is
headquartered in Australia
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[1] American Depositary Shares
[2] The required shareholder resolutions for Plc will include
resolutions relating to the Plc scheme of arrangement, amendment of
Plc's articles of association, the buy-back of the Plc special
voting share and the conversion of Plc into a private company. The
required resolutions for Limited will include resolutions relating
to amendment of Limited's constitution, the buy-back of the Limited
special voting share, the DLC dividend share and the Plc special
voting share and the conversion of Plc into a private company.
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